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Amazon has posted a loss for the second quarter in a row, but its cloud computing arm remains a bright spot in the e-commerce giant’s overall financial performance.
The company has followed up the $3.8bn loss it reported in its first quarter with another loss of $2bn during the second quarter of 2022. For context, the firm banked a profit of $7.8bn during Q2 2021.
The company has partially attributed the loss to a return to normal customer buying patterns, following the relaxation of the Covid-19 protection measures that resulted in the closure of bricks and mortar stores the world over from March 2020 onwards, which Amazon’s online business benefited positively from.
Furthermore, the timing of this year’s Amazon Prime Day, which usually creates a bumper load of additional sales for the firm, fell later than usual. In previous years, the event has fallen under the reporting of Q2, whereas this year its figures will count towards its third-quarter performance.
It also said that ongoing costs linked to its investment in electric car manufacturer Rivian Automotive was also partly to blame.
The investment forms part of Amazon’s commitment to ramping up the use of electric vehicles in its delivery fleet, as the company works towards its goal of having 100,000 of these vehicles at work across the US by 2030.
The company’s net sales were up 7% year-on-year to $121bn, while net sales for its public cloud division, Amazon Web Services (AWS), hit $19.7bn for the quarter – up 33% from $14.8bn during Q2 2021.
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In a statement, Amazon CEO Andy Jassy said the company is in the throes of addressing various factors that have contributed towards it posting a loss this quarter, while other parts of its business – including Amazon Prime – continue to perform well.
“Despite continued inflationary pressures in fuel, energy and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfilment network,” he said.
During a conference call to discuss its second-quarter results in more detail, transcribed by Seeking Alpha, the company’s chief financial officer, Brian Olsavsky, dug a little deeper into the high points of AWS’s second quarter, such as the ongoing expansion of its reference customer list.
“AWS continues to grow at a fast pace, and we believe we are still in the early stages of enterprise and public sector adoption of the cloud,” he said. “We see a great opportunity to continue to make investments on behalf of AWS customers.
“We continue to invest thoughtfully in new infrastructure to meet capacity needs, while expanding AWS to new regions, developing new services and iterating quickly to enhance existing services.”